Four years ago, I opened a small ammunition manufacturing shop in suburban Maryland. I was excited to open this new chapter in my life until I unknowingly became a victim of a punitive government initiative aimed at stores like mine.
Like all new business owners, I had to shop around and find a financial company to process my customers’ credit and debit card transactions. I filled out a number of credit applications, but to my surprise, I kept getting rejections. When I inquired to PayPal, PNC Bank, Stripe, and others, I was told essentially that they did not want to provide processing services to me due to my “industry.”
It was humiliating, to say the least, as my business was completely legal and complied with all applicable federal and state laws. It was discrimination, pure and simple.
I eventually did find a processor, but it came with a cost. First, I ended up having to pay higher fees to accept credit cards. Second, I realized that, at times, I wasn’t able to sell my products online.
Having an online presence is important for the growth of any business, but this became difficult for me as some popular websites and online cart services refused to allow sales or to accept applications to process my payments based solely, again, on my “industry.” As a result, I’ve had to adjust my business model to one that is more in-store and service-oriented, at gun shows for example, to avoid the constant payment-acceptance roadblocks and hassle associated with trying to sell products online.
It wasn’t until several months after I opened my store that I found out the reason for all those rejections I received from banks and processors.
It turns out that, back in 2013, some federal agencies, led by the Department of Justice and the Federal Deposit Insurance Corporation, put in place a plan to pressure banks to end relationships with businesses like mine because we were in a so-called “high risk” or “undesirable” merchant category.
Called “Operation Choke Point,” it was falsely carried out in the name of “consumer protection.”
In March of 2015, I joined other small business owners who had the same experiences with banks as me at a news conference on Capitol Hill where I shared my personal story of frustration, humiliation and discrimination. I also attended a congressional hearing on the subject, which really opened my eyes to how government agencies, which exist to serve the public, were instead used to target and harm business owners like me.
Thankfully, the Trump administration put an end to this devious scheme last year. But unfortunately, for me, nothing has changed.
There is, however, finally some good news. As a result of a federal lawsuit, “Operation Choke Point” documents have recently been released which paint a very disturbing picture of the extent to which this destructive scheme was carried out between those at the highest levels of government and banks through coercion and threats of punitive legal action.
As a small, Main Street business owner, it is truly chilling to see how the government targeted an entire industry for purely political reasons. I hope the unmasking of this operation continues, so as to prevent abusive government behavior like this from ever happening again.
The government needs to do more to encourage, not target and punish, entrepreneurs like me who are truly the backbone of the American economy.
Kat O’Connor is the owner of TomKat Ammunition DBA TK Defense in Gaithersburg, Md.
